SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A1
Annual Report Under Section 13 or 15(d)
Of The Securities Exchange Act Of 1934
For the Fiscal Year Ended: December 31, 1995
Commission file number: 0-18289
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
(Name of Small Business Issuer in its Charter)
State of Minnesota 41-1622463
(State or other Jurisdiction of (I.R.S. Employer)
Incorporation or Organization) Identification No.)
1300 Minnesota World Trade Center, St. Paul, Minnesota 55101
(Address of Principal Executive Offices)
(612) 227-7333
(Issuer's telephone number)
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange on
Title of each class which registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Limited Partnership Units
(Title of class)
Check whether the issuer (1) filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the past 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes [X] No
Check if disclosure of delinquent filers in response to Rule 405
of Regulation S-B is not contained in this Form, and no
disclosure will be contained, to the best of the registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any
amendment to this Form 10-KSB. [X]
The Issuer's revenues for year ended December 31, 1995 were
$1,857,775.
As of February 29, 1996, there were 22,031.80 Units of limited
partnership interest in the registrant outstanding and owned by
nonaffiliates of the registrant, which Units had an aggregate
market value (based solely on the price at which they were sold
since there is no ready market for such Units) of $22,031,800.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant has not incorporated any documents by reference
into this report.
Transitional Small Business Disclosure Format:
Yes No [X]
PART I
ITEM 1. DESCRIPTION OF BUSINESS.
AEI Real Estate Fund XVIII Limited Partnership (the
"Partnership" or the "Registrant") is a limited partnership which
was organized pursuant to the laws of the State of Minnesota on
September 20, 1988. The registrant is comprised of AEI Fund
Management XVIII, Inc. (AFM) as Managing General Partner, Robert
P. Johnson as the Individual General Partner, and purchasers of
partnership units as Limited Partners. The Partnership offered
for sale up to $30,000,000 of limited partnership interests (the
"Units") (30,000 Units at $1,000 per Unit) pursuant to a
registration statement effective December 5, 1988. The
Partnership commenced operations on February 15, 1989 when
minimum subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The Partnership's offering
terminated December 4, 1990 when the extended offering period
expired. The Partnership received subscriptions for 22,783.05
Limited Partnership Units ($22,783,050).
The Partnership was organized to acquire, initially on a
debt-free basis, existing and newly constructed commercial
properties located in the United States and Canada, to lease such
properties to tenants under triple net leases, to hold such
properties and to eventually sell such properties. From
subscription proceeds, the Partnership purchased twenty-one
properties, including partial interests in five properties,
totaling $18,868,379. The balance of the subscription proceeds
was applied to organization and syndication costs, working
capital reserves and distributions, which represented a return of
capital. The properties are all commercial, single tenant
buildings leased under triple net leases.
The Partnership will hold its properties until the General
Partners determine that the sale or other disposition of the
properties is advantageous in view of the Partnership's
investment objectives. In deciding whether to sell properties,
the General Partners will consider factors such as potential
appreciation, net cash flow and income tax considerations. In
addition, certain lessees have been granted options to purchase
properties after a specified portion of the lease term has
elapsed. It is anticipated that the Partnership will sell its
properties within twelve years after acquisition. At any time
prior to selling the properties, the Partnership may mortgage one
or more of its properties in amounts not exceeding 50% of the
aggregate purchase price of all Partnership properties.
Leases
Although there are variations in the specific terms of the
leases, the following is a summary of the general terms of the
Partnership's leases. The properties are leased to various
tenants under noncancelable triple net leases, which are
classified as operating leases. Under a triple net lease, the
lessee is responsible for all real estate taxes, insurance,
maintenance, repairs and operating expenses for the property.
The initial lease terms are for 15 to 20 years. The leases
provide for base annual rental payments, payable in monthly
installments, and contain rent clauses which entitle the
Partnership to receive additional rent in future years based on
stated rent increases or if gross receipts for the property
exceed certain specified amounts, among other conditions.
The leases provide the lessee with two to three five-year
renewal options subject to the same terms and conditions as the
initial lease. Certain lessees have been granted options to
purchase the property. Depending on the lease, the purchase
price is either determined by a formula, or is the greater of the
fair market value of the property or the amount determined by a
formula. In all cases, if the option were to be exercised by the
lessee, the purchase price would be greater than the original
cost of the property.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
The Partnership owns a 4.1022% interest in a Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a Sizzler
restaurant in Springboro, Ohio, and a 100% interest in a Sizzler
restaurant in Fairfield, Ohio. In November, 1993, after
reviewing the lessee's operating results, the Partnership
determined that the lessee would be unable to operate the
restaurants in a manner capable of maximizing the restaurants'
sales. Consequently, at the direction of the Partnership, a
multi-unit restaurant operator assumed operation of the
restaurants while the Partnership reviewed the available options.
In January, 1994 and June, 1994, the Partnership closed
the restaurants in Cincinnati and Springboro, respectively, and
listed them for sale or lease. While the properties are being re-
leased or sold, the Partnership is responsible for the real
estate taxes and other costs required to maintain the properties.
The Partnership agreed to indemnify the operator against
operating deficits while it reviewed the available options.
On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield to Fairfield Foods, Inc. (Fairfield). Fairfield was
not able to profitably operate the restaurant and closed the
restaurant. The Partnership is reviewing the available options,
which include selling or re-leasing the property.
In August, 1995, the lessee of the two Rally's properties
filed for reorganization. After reviewing the operating results
of the lessee, the Partnership agreed to amend the Leases of the
two properties. Effective December 1, 1995, the Partnership
amended the Leases to reduce the base rent from the current
annual rent of $47,498 and $48,392 to $15,000 for each property.
The Partnership could receive additional rent in the future equal
to 6.5% of the amount by which gross receipts exceed $275,000.
The lessee has agreed to pay all post-petition rents due and the
Partnership's related administrative and legal expenses. The
Partnership is owed $29,128 of pre-petition rent, which was not
accrued for financial reporting purposes due to the uncertainty
of collection.
On June 17, 1994, the Partnership sold a 7.0591% interest
in the Applebee's restaurant in Destin, Florida to an unrelated
third party. The Partnership received net sale proceeds of
$111,077 which resulted in a net gain of $36,625. At the time of
sale, the cost and related accumulated depreciation of the
property interest was $78,976 and $4,524, respectively. The
Partnership owns the property as tenants-in-common with an
unrelated third party. The management of the property is
governed by a co-tenancy agreement between the Partnership and
the unrelated third party, which grants the Partnership the
authority to control the management of the property.
On July 6, 1995, the Partnership sold the Cheddar's
restaurant in Columbus, Ohio, to the lessee. The Partnership
received net sale proceeds of $1,259,320, which resulted in a net
gain of $105,291. At the time of sale, the cost and related
accumulated depreciation was $1,306,191 and $152,162,
respectively.
On September 1, 1995, the Partnership sold the Applebee's
restaurant in Memphis, Tennessee, to the lessee. The Partnership
received net sale proceeds of $1,444,822, which resulted in a net
gain of $465,562. At the time of sale, the cost and related
accumulated depreciation was $1,126,919 and $147,659,
respectively.
ITEM 1. DESCRIPTION OF BUSINESS. (Continued)
In October, 1995, the Partnership entered into an
Agreement to purchase an 85% interest in a Tractor Supply Company
store in Bristol, Virginia. The purchase price will be
approximately $1,100,000. The property will be leased to Tractor
Supply Company under a Lease Agreement with a primary term of 14
years and annual rental payments of approximately $117,000. The
Individual General Partner of the Partnership is expected to
acquire the remaining interest.
In November, 1995, the Partnership entered into an
Agreement to purchase approximately an 20% interest in a Champps
Americana restaurant in Columbus, Ohio. The purchase price for
the entire property will be approximately $2,200,000. The
property will be leased to Americana Dining Corporation under a
Lease Agreement with a primary term of 20 years and annual rental
payments of approximately $242,000. AEI Income & Growth Fund XXI
Limited Partnership, an affiliate of the Partnership, is expected
to acquire the remaining interest.
Major Tenants
During 1995, three of the Partnership's lessees each
contributed more than ten percent of the Partnership's total
rental revenue. The major tenants in aggregate contributed 69%
of the Partnership's total rental revenue in 1995. It is
anticipated that, based on the minimum rental payments required
under the leases, each major tenant will continue to contribute
more than ten percent of the Partnership's total rental revenue
in 1996 and future years. In addition, three business concepts,
Children's World Learning Centers, Taco Cabana and Cheddar's
restaurants, each accounted for more than ten percent of the
Partnership's total rental revenue during 1995. It is
anticipated that these business concepts will continue to account
for more than ten percent of the Partnership's total rental
revenue in 1996 and future years. Any failure of these major
tenants or business concepts could materially affect the
Partnership's net income and cash distributions.
Competition
The Partnership is a minor factor in the commercial real
estate business. There are numerous entities engaged in the
commercial real estate business which have greater financial
resources than the Partnership. At the time the Partnership
elects to dispose of its properties, the Partnership will be in
competition with other persons and entities to find buyers for
its properties.
Employees
The Partnership has no direct employees. Management
services are performed for the Partnership by AEI Fund
Management, Inc., an affiliate of AFM.
ITEM 2. DESCRIPTION OF PROPERTIES.
Investment Objectives
The Partnership's investment objectives were to acquire
existing or newly-developed commercial properties throughout the
United States and Canada that offer the potential for (i)
preservation and protection of the Partnership's capital; (ii)
partially tax-deferred cash distributions from operations which
may increase through rent participation clauses or mandated rent
increases; and (iii) long-term capital gains through appreciation
in value of the Partnership's properties realized upon sale. The
Partnership does not have a policy, and there is no limitation,
as to the amount or percentage of assets that may be invested in
any one property. However, to the extent possible, the General
Partners attempt to diversify the type and location of the
Partnership's properties.
Description of Properties
The Partnership's properties are all commercial, single
tenant buildings. All the properties were acquired on a debt-
free basis and are leased to various tenants under noncancelable
triple net leases, which are classified as operating leases. The
Partnership holds an undivided fee simple interest in the
properties. At any time prior to selling the properties, the
Partnership may mortgage one or more of its properties in amounts
not exceeding 50% of the aggregate purchase price of all
Partnership properties.
The Partnership's properties are subject to the general
competitive conditions incident to the ownership of single tenant
investment real estate. Since each property is leased under a
long-term lease, there is little competition until the
Partnership decides to sell the property. At this time, the
Partnership will be competing with other real estate owners, on
both a national and local level, in attempting to find buyers for
the properties. In the event of a tenant default, the
Partnership would be competing with other real estate owners, who
have property vacancies, to attract a new tenant to lease the
property. The Partnership's tenants operate in industries that
are very competitive and can be affected by factors such as
changes in regional or local economies, seasonality and changes
in consumer preference.
The following table is a summary of the properties that
the Partnership acquired and owned as of December 31, 1995.
Total Property
Purchase Acquisition Annual Lease Annual Rent
Property Date Costs Lessee Payment Per Sq. Ft.
Children's World Children's World
Daycare Center Learning
Phoenix, AZ 9/29/89 $ 883,486 Centers, Inc. $ 107,343 $ 13.42
Sizzler Restaurant
Cincinnati, OH
(4.1022%) 1/30/90 $ 66,093 (F1) $ 0 $ 0
Pasta Fair Restaurant Pasta Fair of
Belleview, FL 4/11/90 $ 932,862 Belleview, Inc.$ 60,000 $ 9.84
Children's World Children's World
Daycare Center Learning
Blue Springs, MO 6/27/90 $ 791,271 Centers, Inc. $ 91,406 $ 11.43
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Total Property
Purchase Acquisition Annual Lease Annual Rent
Property Date Costs Lessee Payment Per Sq. Ft.
Sizzler Restaurant
Springboro, OH
(93.2478%) 8/24/90 $1,310,561 (F1) $ 0 $ 0
Children's World Children's World
Daycare Center Learning Centers,
Lenexa, KS 9/13/90 $ 983,527 Inc. $ 114,004 $ 14.07
Taco Cabana Restaurant Texas Taco
San Antonio, TX 12/29/90 $1,406,426 Cabana L.P. $ 184,615 $ 67.43
Cheddar's Restaurant Heartland
Clive, IA 1/22/91 $1,392,248 Restaurant Corp.$ 187,479 $ 26.04
Sizzler Restaurant
Fairfield, OH 3/29/91 $1,608,265 (F1) $ 0 $ 0
Children's World Children's World
Daycare Center Learning Centers,
Westerville, OH 6/21/91 $ 990,261 Inc. $ 113,080 $ 14.17
Taco Cabana Restaurant Texas Taco
San Antonio, TX 7/19/91 $1,151,916 Cabana L.P. $ 154,494 $ 34.52
Taco Cabana Restaurant Red Line
Brownsville, TX 8/9/91 $ 799,938 Taco One, Ltd.$ 109,393 $ 40.52
Applebee's Restaurant
Destin, FL 11/1/91 $1,118,780 T.S.S.O., Inc.$ 139,296 $ 28.95
Taco Cabana Restaurant Texas Taco
New Braunfels, TX 5/1/92 $ 784,045 Cabana L.P. $ 107,730 $ 39.90
Children's World Children's World
Daycare Center Learning Centers,
Columbus, OH 8/10/92 $1,019,202 Inc. $ 110,454 $ 12.50
Rally's Restaurant Red Line San
San Antonio, TX 12/7/92 $ 303,640 Antonio One, LTD $ 15,000 $ 25.51
Rally's Restaurant Red Line San
San Antonio, TX 12/7/92 $ 308,997 Antonio One, LTD $ 15,000 $ 25.51
Applebee's Restaurant Southland Restaurant
Slidell, LA Development
(27%) 5/5/93 $ 280,018 Company, L.L.C. $ 38,424 $ 31.06
ITEM 2. DESCRIPTION OF PROPERTIES. (Continued)
Total Property
Purchase Acquisition Annual Lease Annual Rent
Property Date Costs Lessee Payment Per Sq. Ft.
HomeTown Buffet Restaurant
Tucson, AZ JB's
(24%) 6/16/93 $ 303,733 Restaurants, Inc.$ 37,575 $ 16.29
(F1)The property is vacant and listed for sale or lease.
The properties listed above with a partial ownership
percentage are owned with affiliates of the Partnership. AEI
Real Estate Fund 86-A Limited Partnership owns the remaining
interest in the Sizzler restaurant in Springboro, Ohio. AEI Real
Estate Funds XVI and XVII Limited Partnerships own the remaining
interest in the Sizzler restaurant in Cincinnati, Ohio. AEI Real
Estate Fund XVI Limited Partnership owns the remaining interest
in the Applebee's restaurant in Slidell, Louisiana. AEI Net
Lease Income & Growth Fund XIX Limited Partnership and AEI
Institutional Net Lease Fund '93 own the remaining interest in
the HomeTown Buffet restaurant in Tucson, Arizona. The remaining
properties are owned 100% by the Partnership except for the
Destin property which is owned with a third party and is reported
using the full consolidation method.
Each Partnership owns a separate, undivided interest in
the properties. No specific agreement or commitment exists
between the Partnerships as to the management of their respective
interests in the properties, and the Partnership that holds more
than a 50% interest does not control decisions over the other
Partnership's interest.
The initial Lease terms are for 20 years except for the
Taco Cabana restaurants located in San Antonio and New Braunfels,
Texas, the Rally's restaurants, and the Children's World daycare
centers, which have Lease terms of 15 years. The Leases have
renewal options which may extend the Lease term an additional 10
years, except for the Slidell Applebee's and the Rally's
restaurants which have renewal options that may extend the Lease
term an additional 15 years.
Pursuant to the Lease Agreements, the tenants are required
to provide proof of adequate insurance coverage on the properties
they occupy. The General Partners believe the properties are
adequately covered by insurance and consider the properties to be
well-maintained and sufficient for the Partnership's operations.
For tax purposes, the Partnership's properties are
depreciated under the Modified Accelerated Cost Recovery System
(MACRS). The largest depreciable component of a property is the
building which is depreciated, using the straight-line method,
over 31.5 years. The remaining depreciable components of a
property are personal property and land improvements which are
depreciated, using an accelerated method, over 5 and 15 years,
respectively. Since the Partnership has tax-exempt Partners, the
Partnership is subject to the rules of Section 168(h)(6) of the
Internal Revenue Code which requires a percentage of the
properties' depreciable components to be depreciated over longer
lives using the straight-line method. In general the federal tax
basis of the properties for tax depreciation purposes is the same
as the basis for book depreciation purposes.
All properties were 100 percent occupied by a single
tenant since the date of purchase, with the exception of the
three Sizzler properties, which were 100 percent occupied until
January, 1994 for the Cincinnati location, June, 1994 for the
Springboro location and December, 1994 for the Fairfield
location, and have been vacant since those dates.
ITEM 3. LEGAL PROCEEDINGS.
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S PARTNERSHIP UNITS AND
RELATED SECURITY HOLDER MATTERS.
As of December 31, 1995, there were 1,629 holders of
record of the registrant's Limited Partnership Units. There is
no other class of security outstanding or authorized. The
registrant's Units are not a traded security in any market.
However, the Partnership may purchase Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the total number of Units
outstanding at the beginning of the year and in no event,
obligated to purchase Units if such purchase would impair the
capital or operation of the Partnership.
During 1995, ten Limited Partners redeemed a total of 156
Partnership Units for $119,235 in accordance with the Partnership
Agreement. In prior years, a total of thirty-six Limited
Partners redeemed 549 Partnership Units for $483,397 in
accordance with the Partnership Agreement. The redemptions
increase the remaining Limited Partners' ownership interest in
the Partnership.
Cash distributions of $19,212 and $17,537 were made to the
General Partners and $1,782,761 and $1,685,753 were made to the
Limited Partners in 1995 and 1994, respectively. The
distributions were made on a quarterly basis and represent Net
Cash Flow, as defined, except as discussed below. These
distributions should not be compared with dividends paid on
capital stock by corporations.
As part of the Limited Partner distributions discussed
above, the Partnership distributed proceeds from the property
sales of $684,111 and $109,966 in 1995 and 1994, respectively.
The distributions reduced the Limited Partners' Adjusted Capital
Contributions.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS.
Results of Operations
The Partnership's rental income is derived from long-term,
triple net lease agreements on the Partnership's properties. For
the years ended December 31, 1995 and 1994, the Partnership
recognized rental income of $1,802,007 and $1,948,132,
respectively. During the same periods, the Partnership earned
investment income of $55,768 and $4,760, respectively. In 1995,
rental income decreased mainly as a result of the property sales
and Rally's situation discussed below. The decrease in rental
income was partially offset by rent increases on nine properties
and additional investment income earned on the net proceeds from
the property sales.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
The Partnership owns a 4.1022% interest in a Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a Sizzler
restaurant in Springboro, Ohio, and a 100% interest in a Sizzler
restaurant in Fairfield, Ohio. In November, 1992, after
reviewing the operating results of the lessee, the Partnership
agreed to amend the Lease Agreements of the Sizzler restaurants.
As of November, 1993, the lessee was in default under the amended
Lease Agreements. After reviewing the lessee's operating
results, the Partnership determined that the lessee would be
unable to operate the restaurants in a manner capable of
maximizing the restaurants' sales. Consequently, at the
direction of the Partnership, a multi-unit restaurant operator
assumed operation of the restaurants while the Partnership
reviewed the available options.
In January, 1994 and June, 1994, the Partnership closed
the restaurants in Cincinnati and Springboro, respectively, and
listed them for sale or lease. While the properties are being re-
leased or sold, the Partnership is responsible for the real
estate taxes and other costs required to maintain the properties.
The Partnership agreed to indemnify the operator against
operating deficits while it reviewed the available options. As a
result of the indemnification, the Partnership recognized
additional Partnership administration and property management
expenses of $69,584 in 1994.
On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield to Fairfield Foods, Inc. (Fairfield) under a Lease
Agreement with a primary term of 20 years and annual rental
payments based on a percentage of sales. Fairfield was not able
to profitably operate the restaurant and closed the restaurant.
The Partnership is reviewing the available options, which include
selling or re-leasing the property.
No rents were collected from the Sizzler restaurants in
1995 and 1994. The total amount of rent not collected in 1995
and 1994 was $384,991 and $373,778, respectively, for the three
properties. These amounts were not accrued for financial
reporting purposes.
In August, 1995, the lessee of the two Rally's properties
filed for reorganization. After reviewing the operating results
of the lessee, the Partnership agreed to amend the Leases of the
two properties. Effective December 1, 1995, the Partnership
amended the Leases to reduce the base rent from the current
annual rent of $47,498 and $48,392 to $15,000 for each property.
The Partnership could receive additional rent in the future equal
to 6.5% of the amount by which gross receipts exceed $275,000.
The lessee has agreed to pay all post-petition rents due and the
Partnership's related administrative and legal expenses. The
Partnership is owed $29,128 of pre-petition rent, which was not
accrued for financial reporting purposes due to the uncertainty
of collection.
In November, 1991, the Partnership received a deposit from
the tenant of the Applebee's restaurant in Destin, Florida as
security for future rent payments. The funds were refunded, with
interest, to the tenant in September, 1995, because of the
financial stability of the lessee and the positive operating
performance of the restaurant.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
During the years ended December 31, 1995 and 1994, the
Partnership paid Partnership administration expenses to
affiliated parties of $251,309 and $258,739, respectively. These
administration expenses include costs associated with the
management of the properties, processing distributions, reporting
requirements and correspondence to the Limited Partners. During
the same periods, the Partnership incurred Partnership
administration and property management expenses from unrelated
parties of $81,777 and $151,136, respectively. These expenses
represent direct payments to third parties for legal and filing
fees, direct administrative costs, outside audit and accounting
costs, taxes, insurance and other property costs. The decrease
in these expenses in 1995, when compared to 1994, is the result
of expenses incurred in 1994 related to the Sizzler situation
discussed above.
As of December 31, 1995, the Partnership's annualized cash
distribution rate was 8.18%, based on the Adjusted Capital
Contribution. Distributions of Net Cash Flow to the General
Partners were subordinated to the Limited Partners as required in
the Partnership Agreement. As a result, 99% of distributions and
income were allocated to Limited Partners and 1% to the General
Partners.
Inflation has had a minimal effect on income from
operations. It is expected that increases in sales volumes of
the tenants due to inflation and real sales growth, will result
in an increase in rental income over the term of the Leases.
Inflation also may cause the Partnership's real estate to
appreciate in value. However, inflation and changing prices may
also have an adverse impact on the operating margins of the
properties' tenants which could impair their ability to pay rent
and subsequently reduce the Partnership's Net Cash Flow available
for distributions.
Liquidity and Capital Resources
During 1995, the Partnership's cash balances increased
$2,229,505 due to the sale of two of the Partnership's
properties. Net cash provided by operating activities decreased
from $1,548,082 in 1994 to $1,436,463 in 1995. Net cash income
before depreciation was approximately the same in both years.
The decrease in net cash provided by operating activities was due
to net timing differences in the collection of payments from the
lessees and the payment of expenses by the Partnership.
In 1995 and 1994, net cash provided by investing
activities was $2,695,344 and $111,077, respectively, which
primarily represents the net cash proceeds from the sale of
property.
On June 17, 1994, the Partnership sold a 7.0591% interest
in the Applebee's restaurant in Destin, Florida to an unrelated
third party. The Partnership received net sale proceeds of
$111,077 which resulted in a net gain of $36,625. At the time of
sale, the cost and related accumulated depreciation of the
property interest was $78,976 and $4,524, respectively. The
Partnership owns the property as tenants-in-common with an
unrelated third party. The management of the property is
governed by a co-tenancy agreement between the Partnership and
the unrelated third party, which grants the Partnership the
authority to control the management of the property. The
Partnership accounts for its interest under the full
consolidation method whereby the unrelated third party's interest
in the property is reflected in the Partnership's financial
statements as a minority interest.
On July 6, 1995, the Partnership sold the Cheddar's
restaurant in Columbus, Ohio, to the lessee. The Partnership
received net sale proceeds of $1,259,320, which resulted in a net
gain of $105,291. At the time of sale, the cost and related
accumulated depreciation was $1,306,191 and $152,162,
respectively.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
On September 1, 1995, the Partnership sold the Applebee's
restaurant in Memphis, Tennessee, to the lessee. The Partnership
received net sale proceeds of $1,444,822, which resulted in a net
gain of $465,562. At the time of sale, the cost and related
accumulated depreciation was $1,126,919 and $147,659,
respectively.
During 1995 and 1994, the Partnership distributed $691,021
and $111,077 of the net sale proceeds to the Limited and General
Partners as part of their regular quarterly distributions, which
represented a return of capital of $30.90 and $4.95 per Limited
Partnership Unit, respectively. The majority of the remaining
net proceeds will be reinvested in additional properties.
In October, 1995, the Partnership entered into an
Agreement to purchase an 85% interest in a Tractor Supply Company
store in Bristol, Virginia. The purchase price will be
approximately $1,100,000. The property will be leased to Tractor
Supply Company under a Lease Agreement with a primary term of 14
years and annual rental payments of approximately $117,000. The
Individual General Partner of the Partnership is expected to
acquire the remaining interest.
In November, 1995, the Partnership entered into an
Agreement to purchase approximately a 20% interest in a Champps
Americana restaurant in Columbus, Ohio. The purchase price for
the entire property will be approximately $2,200,000. The
property will be leased to Americana Dining Corporation under a
Lease Agreement with a primary term of 20 years and annual rental
payments of approximately $242,000. AEI Income & Growth Fund XXI
Limited Partnership, an affiliate of the Partnership, is expected
to acquire the remaining interest.
The Partnership's primary use of cash flow is distribution
and redemption payments to Partners. The Partnership declares
its regular quarterly distributions before the end of each
quarter and pays the distribution in the first week after the end
of each quarter. The Partnership attempts to maintain a stable
distribution rate from quarter to quarter. Redemption payments
are paid to redeeming Partners in the fourth quarter of each
year. The redemption payments generally are funded with cash
that would normally be paid as part of the regular quarterly
distributions. As a result, total distributions and
distributions payable have fluctuated from year to year due to
cash used to fund redemption payments. This is one of the
reasons why distributions to Partners were higher in 1995 when
compared to 1994.
The Partnership may acquire Units from Limited Partners
who have tendered their Units to the Partnership. Such Units may
be acquired at a discount. The Partnership is not obligated to
purchase in any year more than 5% of the number of Units
outstanding at the beginning of the year and in no event,
obligated to purchase Units if such purchase would impair the
capital or operation of the Partnership.
During 1995, ten Limited Partners redeemed a total of 156
Partnership Units for $119,235 in accordance with the Partnership
Agreement. The Partnership acquired these Units using Net Cash
Flow from operations. In prior years, a total of thirty-six
Limited Partners redeemed 549 Partnership Units for $483,397.
The redemptions increase the remaining Limited Partners'
ownership interest in the Partnership.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS. (Continued)
In January, 1994, the Partnership established a $150,000
unsecured line of credit at Fidelity Bank of Edina, Minnesota.
On January 5, 1995, the line of credit was increased to $300,000.
The line of credit bears interest at the prime rate (8.5% on
December 31, 1995 and 1994) plus one percent on the outstanding
balance, which is due on demand, but in any event no later than
January 5, 1996. The line of credit was established to provide
short-term financing to cover any temporary cash deficits. As of
December 31, 1995 and 1994, no amount was due on the line of
credit. In 1995 and 1994, interest expense related to the line
of credit was $6,115 and $1,535, respectively.
The continuing rent payments from the properties, together
with cash generated from the property sales, should be adequate
to fund continuing distributions and meet other Partnership
obligations on both a short-term and long-term basis.
ITEM 7. FINANCIAL STATEMENTS.
See accompanying index to financial statements.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
INDEX TO FINANCIAL STATEMENTS
Independent Auditor's Report
Balance Sheet as of December 31, 1995 and 1994
Statements for the Years Ended December 31, 1995 and 1994:
Income
Cash Flows
Changes in Partners' Capital
Notes to Financial Statements
INDEPENDENT AUDITOR'S REPORT
To the Partners:
AEI Real Estate Fund XVIII Limited Partnership
St. Paul, Minnesota
We have audited the accompanying balance sheet of AEI REAL
ESTATE FUND XVIII LIMITED PARTNERSHIP (a Minnesota limited
partnership) as of December 31, 1995 and 1994 and the related
statements of income, cash flows and changes in partners' capital
for the years then ended. These financial statements are the
responsibility of the Partnership's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of AEI Real Estate Fund XVIII Limited Partnership as of December
31, 1995 and 1994 and the results of its operations and its cash
flows for the years then ended, in conformity with generally
accepted accounting principles.
Minneapolis, Minnesota /s/ Boulay, Heutmaker, Zibell & Co. P.L.L.P.
February 6, 1996 Certified Public Accountants
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
BALANCE SHEET
DECEMBER 31
ASSETS
1995 1994
CURRENT ASSETS:
Cash and Cash Equivalents $ 2,332,974 $ 103,469
Receivables 43,389 20,227
----------- -----------
Total Current Assets 2,376,363 123,696
----------- -----------
INVESTMENTS IN REAL ESTATE:
Land 5,370,160 6,326,335
Buildings and Equipment 11,065,109 12,542,044
Property Acquisition Costs 8,798 0
Accumulated Depreciation (1,932,655) (1,786,828)
----------- -----------
Net Investments in Real Estate 14,511,412 17,081,551
----------- -----------
Total Assets $ 16,887,775 $ 17,205,247
=========== ===========
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES:
Payable to AEI Fund Management, Inc. $ 49,968 $ 49,433
Distributions Payable 406,381 387,475
Security Deposit 0 50,000
Unearned Rent 5,000 5,000
----------- -----------
Total Current Liabilities 461,349 491,908
----------- -----------
MINORITY INTEREST 76,319 78,043
PARTNERS' CAPITAL (DEFICIT):
General Partners (29,971) (27,119)
Limited Partners, $1,000 Unit Value;
30,000 Units authorized; 22,783 Issued;
22,078 and 22,234 outstanding in 1995 and
1994, respectively 16,380,078 16,662,415
----------- -----------
Total Partners' Capital 16,350,107 16,635,296
----------- -----------
Total Liabilities and Partners' Capital $ 16,887,775 $ 17,205,247
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF INCOME
FOR THE YEARS ENDED DECEMBER 3l
1995 1994
INCOME:
Rent $ 1,802,007 $ 1,948,132
Investment Income 55,768 4,760
----------- -----------
Total Income 1,857,775 1,952,892
----------- -----------
EXPENSES:
Partnership Administration - Affiliates 251,309 258,739
Partnership Administration and Property
Management - Unrelated Parties 81,777 151,136
Interest 6,115 1,535
Depreciation 445,648 468,760
----------- -----------
Total Expenses 784,849 880,170
----------- -----------
OPERATING INCOME 1,072,926 1,072,722
GAIN ON SALE OF REAL ESTATE 570,853 36,625
MINORITY INTEREST IN OPERATING INCOME (7,760) (4,225)
----------- -----------
NET INCOME $ 1,636,019 $ 1,105,122
=========== ===========
NET INCOME ALLOCATED:
General Partners $ 16,360 $ 11,051
Limited Partners 1,619,659 1,094,071
----------- -----------
$ 1,636,019 $ 1,105,122
=========== ===========
NET INCOME PER LIMITED PARTNERSHIP UNIT
(22,194 and 22,279 weighted average Units
outstanding in 1995 and 1994, respectively) $ 72.98 $ 49.11
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 3l
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 1,636,019 $ 1,105,122
Adjustments To Reconcile Net Income
To Net Cash Provided By Operating Activities:
Depreciation 445,648 468,760
Gain on Sale of Real Estate (570,853) (36,625)
Increase in Receivables (23,162) (19,980)
Increase in Payable to
AEI Fund Management, Inc. 535 31,738
Decrease in Security Deposit (50,000) 0
Minority Interest (1,724) (933)
----------- -----------
Total Adjustments (199,556) 442,960
----------- -----------
Net Cash Provided By
Operating Activities 1,436,463 1,548,082
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Investments in Real Estate (8,798) 0
Proceeds from Sale of Real Estate 2,704,142 111,077
----------- -----------
Net Cash Provided By
Investing Activities 2,695,344 111,077
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Distributions Payable 18,906 18,554
Distributions to Partners (1,800,768) (1,702,780)
Redemption Payments (120,440) (50,977)
----------- -----------
Net Cash Used For
Financing Activities (1,902,302) (1,735,203)
----------- -----------
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS 2,229,505 (76,044)
CASH AND CASH EQUIVALENTS,
beginning of period 103,469 179,513
----------- -----------
CASH AND CASH EQUIVALENTS,
end of period $ 2,332,974 $ 103,469
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest Paid During the Year $ 6,115 $ 1,535
=========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
<PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
STATEMENT OF CHANGES IN PARTNERS' CAPITAL
FOR THE YEARS ENDED DECEMBER 3l
Limited
Partnership
General Limited Units
Partners Partners Total Outstanding
BALANCE, December 31, 1993 $ (20,633) $17,304,564 $17,283,931 22,294.80
Distributions (17,027) (1,685,753) (1,702,780)
Redemption Payments (510) (50,467) (50,977) (61.00)
Net Income 11,051 1,094,071 1,105,122
--------- ----------- ----------- -----------
BALANCE, December 31, 1994 (27,119) 16,662,415 16,635,296 22,233.80
Distributions (18,007) (1,782,761) (1,800,768)
Redemption Payments (1,205) (119,235) (120,440) (156.00)
Net Income 16,360 1,619,659 1,636,019
--------- ----------- ----------- -----------
BALANCE, December 31, 1995 $ (29,971) $16,380,078 $16,350,107 22,077.80
========= =========== =========== ===========
The accompanying notes to financial statements are an integral
part of this statement.
</PAGE>
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(1) Organization -
AEI Real Estate Fund XVIII Limited Partnership (Partnership)
was formed to acquire and lease commercial properties to
operating tenants. The Partnership's operations are managed
by AEI Fund Management XVIII, Inc. (AFM), the Managing
General Partner of the Partnership. Robert P. Johnson, the
President and sole shareholder of AFM, serves as the
Individual General Partner of the Partnership. An affiliate
of AFM, AEI Fund Management, Inc. (AEI), performs the
administrative and operating functions for the Partnership.
The terms of the Partnership offering call for a
subscription price of $1,000 per Limited Partnership Unit,
payable on acceptance of the offer. The Partnership
commenced operations on February 15, 1989 when minimum
subscriptions of 1,500 Limited Partnership Units
($1,500,000) were accepted. The Partnership's offering
terminated December 4, 1990 when the extended offering
period expired. The Partnership received subscriptions for
22,783.05 Limited Partnership Units ($22,783,050).
Under the terms of the Limited Partnership Agreement, the
Limited Partners and General Partners contributed funds of
$22,783,050, and $1,000, respectively. During the operation
of the Partnership, any Net Cash Flow, as defined, which the
General Partners determine to distribute will be distributed
90% to the Limited Partners and 10% to the General Partners;
provided, however, that such distributions to the General
Partners will be subordinated to the Limited Partners first
receiving an annual, noncumulative distribution of Net Cash
Flow equal to 10% of their Adjusted Capital Contribution, as
defined, and, provided further, that in no event will the
General Partners receive less than 1% of such Net Cash Flow
per annum. Distributions to Limited Partners will be made
pro rata by Units.
Any Net Proceeds of Sale as defined, from the sale or
financing of the Partnership's properties which the General
Partners determine to distribute will, after provisions for
debts and reserves, be paid in the following manner: (i)
first, 99% to the Limited Partners and l% to the General
Partners until the Limited Partners receive an amount equal
to: (a) their Adjusted Capital Contribution plus (b) an
amount equal to 6% of their Adjusted Capital Contribution
per annum, cumulative but not compounded, to the extent not
previously distributed from Net Cash Flow; (ii) next, 99% to
the Limited Partners and 1% to the General Partners until
the Limited Partners receive an amount equal to 14% of their
Adjusted Capital Contribution per annum, cumulative but not
compounded, to the extent not previously distributed; (iii)
next, to the General Partners until cumulative distributions
to the General Partners under Items (ii) and (iii) equal 15%
of cumulative distributions to all Partners under Items (ii)
and (iii). Any remaining balance will be distributed 85% to
the Limited Partners and 15% to the General Partners.
Distributions to the Limited Partners will be made pro rata
by Units.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(1) Organization - (Continued)
For tax purposes, profits from operations, other than
profits attributable to the sale, exchange, financing,
refinancing or other disposition of the Partnership's
property, will be allocated first in the same ratio in
which, and to the extent, Net Cash Flow is distributed to
the Partners for such year. Any additional profits will be
allocated 90% to the Limited Partners and 10% to the General
Partners. In the event no Net Cash Flow is distributed to
the Limited Partners, 90% of each item of Partnership
income, gain or credit for each respective year shall be
allocated to the Limited Partners, and 10% of each such item
shall be allocated to the General Partners. Net losses from
operations will be allocated 98% to the Limited Partners and
2% to the General Partners.
For tax purposes, profits arising from the sale, financing,
or other disposition of the Partnership's property will be
allocated in accordance with the Partnership Agreement as
follows: (i) first, to those partners with deficit balances
in their capital accounts in an amount equal to the sum of
such deficit balances; (ii) second, 99% to the Limited
Partners and 1% to the General Partners until the aggregate
balance in the Limited Partners' capital accounts equals the
sum of the Limited Partners' Adjusted Capital Contributions
plus an amount equal to 14% of their Adjusted Capital
Contributions per annum, cumulative but not compounded, to
the extent not previously allocated; (iii) third, to the
General Partners until cumulative allocations to the General
Partners equal 15% of cumulative allocations. Any remaining
balance will be allocated 85% to the Limited Partners and
15% to the General Partners. Losses will be allocated 98%
to the Limited Partners and 2% to the General Partners.
The General Partners are not required to currently fund a
deficit capital balance. Upon liquidation of the
Partnership or withdrawal by a General Partner, the General
Partners will contribute to the Partnership an amount equal
to the lesser of the deficit balances in their capital
accounts or 1% of total Limited Partners' and General
Partners' capital contributions.
(2) Summary of Significant Accounting Policies -
Financial Statement Presentation
The accounts of the Partnership are maintained on the
accrual basis of accounting for both federal income tax
purposes and financial reporting purposes.
Accounting Estimates
Management uses estimates and assumptions in preparing
these financial statements in accordance with generally
accepted accounting principles. Those estimates and
assumptions may affect the reported amounts of assets and
liabilities, the disclosure of contingent assets and
liabilities, and the reported revenues and expenses.
Actual results could differ from those estimates.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(2) Summary of Significant Accounting Policies - (Continued)
The Partnership regularly assesses whether market events
and conditions indicate that it is reasonably possible to
recover the carrying amounts of its investments in real
estate from future operations and sales. A change in
those market events and conditions could have a material
effect on the carrying amount of its real estate.
Cash and Cash Equivalents
Cash and cash equivalents include all cash and highly
liquid investment securities with maturities at
acquisition of three months or less. Such investment
securities are carried at cost plus accrued interest which
approximates fair market value.
Cash Concentrations of Credit Risk
At times throughout the year, the Partnership's cash
deposited in financial institutions may exceed FDIC
insurance limits.
Statement of Cash Flows
For purposes of reporting cash flows, cash and cash
equivalents include cash in checking, cash invested in
money market accounts, certificates of deposit, federal
agency notes and commercial paper with a term of three
months or less.
Income Taxes
The income or loss of the Partnership for federal income
tax reporting purposes is includable in the income tax
returns of the partners. Accordingly, no recognition has
been given to income taxes in the accompanying financial
statements.
The tax return, the qualification of the Partnership as
such for tax purposes, and the amount of distributable
Partnership income or loss are subject to examination by
federal and state taxing authorities. If such an
examination results in changes with respect to the
Partnership qualification or in changes to distributable
Partnership income or loss, the taxable income of the
partners would be adjusted accordingly.
Real Estate
The Partnership's real estate is leased under long-term
triple net leases classified as operating leases. The
Partnership recognizes rental revenue on the accrual
basis according to the terms of the individual leases.
For leases which contain cost of living increases, the
increases are recognized in the year in which they are
effective.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(2) Summary of Significant Accounting Policies - (Continued)
In 1995, the Partnership elected early adoption of the
Statement of Financial Accounting Standards No. 121,
"Accounting for Impairment of Long-Lived Assets and for
Long-Lived Assets to be Disposed Of." This standard
requires the Partnership to compare the carrying amount
of its properties to the estimated future cash flows
expected to result from the property and its eventual
disposition. If the sum of the expected future cash
flows is less than the carrying amount of the property,
the Statement requires the Partnership to recognize an
impairment loss by the amount by which the carrying
amount of the property exceeds the fair value of the
property. Adoption of this Statement is not expected to
have a material effect on the Partnership's financial
statements.
The Partnership has capitalized as Investments in Real
Estate certain costs incurred in the review and
acquisition of the properties. The costs were allocated
to the land, buildings and equipment.
The buildings and equipment of the Partnership are
depreciated using the straight-line method for financial
reporting purposes based on estimated useful lives of 30
years and 10 years, respectively.
For properties owned as tenants-in-common with third
parties, other than affiliated partnerships, the
Partnership accounts for its interest under the full
consolidation method whereby the unrelated third parties'
interests in the properties are reflected in the
Partnership's financial statements as a minority
interest.
(3) Related Party Transactions -
On January 30, 1990, the Partnership acquired a 4.1022%
interest in the Sizzler restaurant in Cincinnati, Ohio. On
June 7, 1990, the Partnership acquired an 80% interest in
the Cheddar's restaurant in Columbus, Ohio. On August 24,
1990, the Partnership acquired a 93.2478% interest in the
Sizzler restaurant in Springboro, Ohio. On May 5, 1993, the
Partnership acquired a 27% interest in the Applebee's
restaurant in Slidell, Louisiana. On June 16, 1993, the
Partnership acquired a 24% interest in the HomeTown Buffet
restaurant in Tucson, Arizona. The remaining interests in
these properties are owned by affiliates of the Partnership.
AEI Real Estate Funds XVI and XVII Limited Partnerships own
the remaining interest in the Sizzler restaurant in
Cincinnati, Ohio. AEI Real Estate Fund 86-A Limited
Partnership owns the remaining interests in the Cheddar's
restaurant and the Sizzler restaurant in Springboro, Ohio.
AEI Real Estate Fund XVI Limited Partnership owns the
remaining interest in the Applebee's restaurant in Slidell,
Louisiana. AEI Net Lease Income & Growth Fund XIX Limited
Partnership and AEI Institutional Net Lease Fund '93 own the
remaining interest in the HomeTown Buffet restaurant in
Tucson, Arizona.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(3) Related Party Transactions - (Continued)
Each Partnership owns a separate, undivided interest in the
properties. No specific agreement or commitment exists
between the Partnerships as to the management of their
respective interests in the properties, and the Partnership
that holds more than a 50% interest does not control
decisions over the other Partnership's interest. The
financial statements reflect only this Partnership's
percentage share of the properties' land, building and
equipment, liabilities, revenues and expenses.
AFM and AEI received the following compensation and
reimbursements for costs and expenses from the Partnership:
Total Incurred by the Partnership
for the Years Ended December 31
1995 1994
a. AEI and AFM are reimbursed for all costs
incurred in connection with managing the
Partnership's operations, maintaining the
Partnership's books and communicating
the results of operations to the Limited
Partners. $ 251,309 $ 258,739
======== ========
b. AEI and AFM are reimbursed for all direct
expenses they have paid on the Partnership's
behalf to third parties. These expenses included
printing costs, legal and filing fees, direct
administrative costs, outside audit and
accounting costs, taxes, insurance and
other property costs. $ 81,777 $ 152,671
======== ========
c. AEI is reimbursed for all property acquisition
costs incurred by it in acquiring properties on
behalf of the Partnership. The amounts are net
of financing and commitment fees and expense
reimbursements received by the Partnership from
the lessees in the amount of $8,000 for 1995. $ 8,798 $ 0
======== ========
The payable to AEI Fund Management, Inc. represents the
balance due for the services described in 3a, b and c. This
balance is non-interest bearing and unsecured and is to be
paid in the normal course of business.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(4) Investments in Real Estate -
The Partnership leases its properties to various tenants
through non-cancelable triple net leases, which are
classified as operating leases. Under a triple net lease,
the lessee is responsible for all real estate taxes,
insurance, maintenance, repairs and operating expenses of
the property. The initial Lease terms are for 20 years
except for the Taco Cabana restaurants in San Antonio and
New Braunfels, Texas, the Rally's restaurants, and the
Children's World daycare centers, which have Lease terms of
15 years. The Leases have renewal options which may extend
the Lease term an additional 10 years, except for the
Slidell Applebee's and the Rally's restaurants which have
renewal options that may extend the Lease term an additional
15 years. The Leases contain rent clauses which entitle the
Partnership to receive additional rent in future years based
on stated rent increases or if gross receipts for the
property exceed certain specified amounts, among other
conditions. Certain lessees have been granted options to
purchase the property. Depending on the lease, the purchase
price is either determined by a formula, or is the greater
of the fair market value of the property or the amount
determined by a formula. In all cases, if the option were
to be exercised by the lessee, the purchase price would be
greater than the original cost of the property.
The Partnership's properties are all commercial, single-
tenant buildings. The Taco Cabana restaurant purchased on
July 19, 1991 was originally constructed in 1984 and was
renovated in 1991. The Children's World daycare center in
Phoenix was constructed in 1988 and the HomeTown Buffet
restaurant in Tucson was constructed in 1993. All other
properties were constructed in 1989, 1990, 1991 or 1992.
The Partnership acquired the Phoenix Children's World
daycare center in 1989. The Partnership acquired its
interest in the Slidell Applebee's restaurant and the Tucson
HomeTown Buffet restaurant in 1993. All other properties
were acquired in 1990, 1991 and 1992. There have been no
costs capitalized as improvements subsequent to the
acquisitions.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(4) Investments in Real Estate - (Continued)
For those properties in the table below which do not have
land costs, the lessee has entered into long-term land
leases with unrelated third parties. The cost of the
properties and related accumulated depreciation at December
31, 1995 are as follows:
Buildings and Accumulated
Property Land Equipment Total Depreciation
Children's World, Phoenix, AZ $ 259,467 $ 624,019 $ 883,486 $ 150,954
Sizzler, Cincinnati, OH 15,677 50,416 66,093 12,381
Pasta Fair Restaurant,
Belleview, FL 251,593 681,269 932,862 129,630
Children's World,
Blue Springs, MO 162,290 628,981 791,271 129,559
Sizzler, Springboro, OH 355,686 954,875 1,310,561 205,543
Children's World, Lenexa, KS 185,788 797,739 983,527 156,256
Taco Cabana, San Antonio, TX 871,844 534,582 1,406,426 99,577
Cheddar's, Clive, IA 379,249 1,012,999 1,392,248 193,902
Sizzler, Fairfield, OH 532,496 1,075,769 1,608,265 204,198
Children's World,
Westerville, OH 157,848 832,413 990,261 138,438
Taco Cabana, San Antonio, TX 651,063 500,853 1,151,916 73,737
Taco Cabana, Brownsville, TX 361,652 438,286 799,938 64,525
Applebee's, Destin, FL 518,778 600,002 1,118,780 97,207
Taco Cabana, New Braunfels, TX 240,859 543,186 784,045 68,996
Children's World,
Columbus, OH 157,569 861,633 1,019,202 106,611
Rally's, San Antonio, TX 0 303,640 303,640 36,647
Rally's, San Antonio, TX 0 308,997 308,997 37,037
Applebee's, Slidell, LA 104,613 175,405 280,018 15,592
HomeTown Buffet,
Tucson, AZ 163,688 140,045 303,733 11,865
----------- ----------- ----------- ----------
$ 5,370,160 $11,065,109 $16,435,269 $1,932,655
=========== =========== =========== ==========
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(4) Investments in Real Estate - (Continued)
The Partnership owns a 4.1022% interest in a Sizzler
restaurant in Cincinnati, Ohio, a 93.2478% interest in a
Sizzler restaurant in Springboro, Ohio, and a 100% interest
in a Sizzler restaurant in Fairfield, Ohio. In November,
1992, after reviewing the operating results of the lessee,
the Partnership agreed to amend the Lease Agreements of the
Sizzler restaurants. As of November, 1993, the lessee was
in default under the amended Lease Agreements. After
reviewing the lessee's operating results, the Partnership
determined that the lessee would be unable to operate the
restaurants in a manner capable of maximizing the
restaurants' sales. Consequently, at the direction of the
Partnership, a multi-unit restaurant operator assumed
operation of the restaurants while the Partnership reviewed
the available options.
In January, 1994 and June, 1994, the Partnership closed the
restaurants in Cincinnati and Springboro, respectively, and
listed them for sale or lease. While the properties are
being re-leased or sold, the Partnership is responsible for
the real estate taxes and other costs required to maintain
the properties. The Partnership agreed to indemnify the
operator against operating deficits while it reviewed the
available options. As a result of the indemnification, the
Partnership recognized additional Partnership administration
and property management expenses of $69,584 in 1994.
On July 15, 1994, the Partnership re-leased the Sizzler in
Fairfield to Fairfield Foods, Inc. (Fairfield) under a Lease
Agreement with a primary term of 20 years and annual rental
payments based on a percentage of sales. Fairfield was not
able to profitably operate the restaurant and closed the
restaurant. The Partnership is reviewing the available
options, which include selling or re-leasing the property.
No rents were collected from the Sizzler restaurants in 1995
and 1994. The total amount of rent not collected in 1995
and 1994 was $384,991 and $373,778, respectively, for the
three properties. These amounts were not accrued for
financial reporting purposes.
In August, 1995, the lessee of the two Rally's properties
filed for reorganization. After reviewing the operating
results of the lessee, the Partnership agreed to amend the
Leases of the two properties. Effective December 1, 1995,
the Partnership amended the Leases to reduce the base rent
from the current annual rent of $47,498 and $48,392 to
$15,000 for each property. The Partnership could receive
additional rent in the future equal to 6.5% of the amount by
which gross receipts exceed $275,000. The lessee has agreed
to pay all post-petition rents due and the Partnership's
related administrative and legal expenses. The Partnership
is owed $29,128 of pre-petition rent, which was not accrued
for financial reporting purposes due to the uncertainty of
collection.
On June 17, 1994, the Partnership sold a 7.0591% interest in
the Applebee's restaurant in Destin, Florida to an unrelated
third party. The Partnership received net sale proceeds of
$111,077 which resulted in a net gain of $36,625. At the
time of sale, the cost and related accumulated depreciation
of the property interest was $78,976 and $4,524,
respectively.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(4) Investments in Real Estate - (Continued)
The Partnership owns the Destin property as tenants-in-
common with an unrelated third party. The management of the
property is governed by a co-tenancy agreement between the
Partnership and the unrelated third party, which grants the
Partnership the authority to control the management of the
property.
On July 6, 1995, the Partnership sold the Cheddar's
restaurant in Columbus, Ohio, to the lessee. The
Partnership received net sale proceeds of $1,259,320, which
resulted in a net gain of $105,291. At the time of sale,
the cost and related accumulated depreciation was $1,306,191
and $152,162, respectively.
On September 1, 1995, the Partnership sold the Applebee's
restaurant in Memphis, Tennessee, to the lessee. The
Partnership received net sale proceeds of $1,444,822, which
resulted in a net gain of $465,562. At the time of sale,
the cost and related accumulated depreciation was $1,126,919
and $147,659, respectively.
During 1995 and 1994, the Partnership distributed $691,021
and $111,077 of the net sale proceeds to the Limited and
General Partners as part of their regular quarterly
distributions, which represented a return of capital of
$30.90 and $4.95 per Limited Partnership Unit, respectively.
The majority of the remaining net proceeds will be
reinvested in additional properties.
In October, 1995, the Partnership entered into an Agreement
to purchase an 85% interest in a Tractor Supply Company
store in Bristol, Virginia. The purchase price will be
approximately $1,100,000. The property will be leased to
Tractor Supply Company under a Lease Agreement with a
primary term of 14 years and annual rental payments of
approximately $117,000. The Individual General Partner of
the Partnership is expected to acquire the remaining
interest.
In November, 1995, the Partnership entered into an Agreement
to purchase approximately a 20% interest in a Champps
Americana restaurant in Columbus, Ohio. The purchase price
for the entire property will be approximately $2,200,000.
The property will be leased to Americana Dining Corporation
under a Lease Agreement with a primary term of 20 years and
annual rental payments of approximately $242,000. AEI
Income & Growth Fund XXI Limited Partnership, an affiliate
of the Partnership, is expected to acquire the remaining
interest. The Partnership has incurred net costs of $8,798
related to the acquisition of the properties. The costs
have been capitalized and will be allocated to land,
building and equipment.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(4) Investments in Real Estate - (Continued)
The Partnership's share of the minimum future rentals on the
non-cancelable Leases for years subsequent to December 31,
1995 are as follows:
1996 $ 1,586,910
1997 1,606,062
1998 1,624,244
1999 1,644,926
2000 1,666,287
Thereafter 13,946,919
-----------
$ 22,075,348
===========
The Partnership recognized contingent rents of $10,372 and
$28,906 in 1995 and 1994, respectively.
(5) Security Deposit -
In November, 1991, the Partnership received a deposit from
the tenant of the Applebee's restaurant in Destin, Florida
as security for future rent payments. The funds were
refunded, with interest, to the tenant in September, 1995,
because of the financial stability of the lessee and the
positive operating performance of the restaurant.
(6) Line of Credit-
In January, 1994, the Partnership established a $150,000
unsecured line of credit at Fidelity Bank of Edina,
Minnesota. On January 5, 1995, the line of credit was
increased to $300,000. The line of credit bears interest at
the prime rate (8.5% on December 31, 1995 and 1994) plus one
percent on the outstanding balance, which is due on demand,
but in any event no later than January 5, 1996. The line of
credit was established to provide short-term financing to
cover any temporary cash deficits. As of December 31, 1995
and 1994, no amount was due on the line of credit. In 1995
and 1994, interest expense related to the line of credit was
$6,115 and $1,535, respectively.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(7) Major Tenants -
The following schedule presents rent revenue from individual
tenants, or affiliated groups of tenants, who each
contributed more than ten percent of the Partnership's total
rent revenue for the years ended December 31:
Tenants who individually generate
10% or more of total rent revenue:
1995 1994
Tenants Industry
Children's World
Learning Centers, Inc. Child Care $ 529,191 $ 517,767
Heartland Restaurant Corp. Restaurant 269,763 340,280
Texas Taco Cabana L.P. Restaurant 444,049 432,467
Red Line Taco One &
Affiliates Restaurant N/A 198,379
----------- -----------
Aggregate rent revenue of major tenants $ 1,243,003 $ 1,488,893
=========== ===========
Aggregate rent revenue of major tenants as
a percentage of total rent revenue 69% 76%
=========== ===========
(8) Partners' Capital -
Cash distributions of $19,212 and $17,537 were made to the
General Partners and $1,782,761 and $1,685,753 were made to
the Limited Partners for the years ended December 31, 1995
and 1994, respectively. The Limited Partners' distributions
represent $80.33 and $75.67 per Limited Partnership Unit
outstanding using 22,194 and 22,279 weighted average Units
in 1995 and 1994, respectively. The distributions represent
$67.58 and $46.84 and per Unit of Net Income, and $12.75 and
$28.83 per Unit of return of contributed capital in 1995 and
1994, respectively.
As part of the Limited Partner distributions discussed
above, the Partnership distributed proceeds from the
property sales of $684,111 and $109,966 in 1995 and 1994,
respectively. The distributions reduced the Limited
Partners' Adjusted Capital Contributions.
Distributions of Net Cash Flow to the General Partners
during 1995 and 1994 were subordinated to the Limited
Partners as required in the Partnership Agreement. As a
result, 99% of distributions and income were allocated to
the Limited Partners and 1% to the General Partners.
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(8) Partners' Capital - (Continued)
The Partnership may acquire Units from Limited Partners who
have tendered their Units to the Partnership. Such Units
may be acquired at a discount. The Partnership is not
obligated to purchase in any year more than 5% of the number
of Units outstanding at the beginning of the year. In no
event shall the Partnership be obligated to purchase Units
if, in the sole discretion of the Managing General Partner,
such purchase would impair the capital or operation of the
Partnership.
During 1995, ten Limited Partners redeemed a total of 156
Partnership Units for $119,235 in accordance with the
Partnership Agreement. The Partnership acquired these Units
using Net Cash Flow from operations. In 1994, six Limited
Partners redeemed a total of 61 Partnership Units for
$50,467. The redemptions increase the remaining Limited
Partners' ownership interest in the Partnership.
After the effect of redemptions and the return of capital
from the sale of property, the Adjusted Capital
Contribution, as defined in the Partnership Agreement, is
$995.98 per original $1,000 invested.
(9) Income Taxes -
The following is a reconciliation of net income for
financial reporting purposes to income reported for federal
income tax purposes for the years ended December 31:
1995 1994
Net Income For Financial
Reporting Purposes $ 1,636,019 $ 1,105,122
Depreciation for Tax Purposes
Under Depreciation For Financial
Reporting Purposes 46,707 33,054
Amortization of Start-Up and
Organization Costs (72,344) (84,197)
Property Expenses for Tax Purposes
Over Expenses for Financial
Reporting Purposes 0 (69,073)
Gain on Sale of Real Estate for
Tax Purposes Over (Under) Gain for
Financial Reporting Purposes (25,318) 1,182
----------- -----------
Taxable Income to Partners $ 1,585,064 $ 986,088
=========== ===========
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(9) Income Taxes - (Continued)
The following is a reconciliation of Partners' capital for
financial reporting purposes to Partners' capital reported
for federal income tax purposes for the years ended December
31:
1995 1994
Partners' Capital For
Financial Reporting Purposes $16,350,107 $16,635,296
Depreciation For Tax Purposes Over
Depreciation For Financial
Reporting Purposes (15,198) (61,905)
Capitalized Start-Up Costs
Under Section 195 419,267 419,267
Amortization of Start-Up and
Organization Costs (381,473) (309,129)
Income Accrued For Tax Purposes Over
Income For Financial
Reporting Purposes 5,000 5,000
Gain on Sale of Real Estate for
Tax Purposes Over (Under) Gain for
Financial Reporting Purposes (24,136) 1,182
Organization and Syndication Costs
Treated as Reduction of Capital
For Financial Reporting Purposes 3,342,442 3,342,442
----------- -----------
Partners' Capital For
Tax Reporting Purposes $19,696,009 $20,032,153
=========== ===========
AEI REAL ESTATE FUND XVIII LIMITED PARTNERSHIP
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1995 AND 1994
(10) Fair Value of Financial Instruments -
The estimated fair values of the financial instruments, none
of which are held for trading purposes, are as follows at
December 31, 1995:
1995
Carrying Fair
Amount Value
Cash $ 2,940 $ 2,940
Money Market Funds 1,339,592 1,339,592
U.S. Treasury Security (held to maturity) 990,442 990,442
----------- -----------
Total Cash and Cash Equivalents $ 2,332,974 $ 2,332,974
=========== ===========
The amortized cost basis of the U.S. Treasury security, is
not materially different from its carrying amount or fair
value.
(11) Contingencies -
The Partnership is subject to legal proceedings and claims
which arise in the ordinary course of its business. In the
opinion of management, such legal proceedings and claims are
immaterial and are not likely to have a material adverse
impact on the Partnership's financial statements.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The registrant is a limited partnership and has no
officers, directors, or direct employees. The General Partners
of the registrant are Robert P. Johnson and AFM. The General
Partners manage and control the Partnership's affairs and have
general responsibility and the ultimate authority in all matters
affecting the Partnership's business. The director and officers
of AFM are as follows:
Robert P. Johnson, age 51, is Chief Executive Officer,
President and Director and has held these positions since the
formation of AFM in September, 1988, and has been elected to
continue in these positions until September, 1996. From 1970 to
the present, he has been employed exclusively in the investment
industry, specializing in tax-advantaged limited partnership
investments. In that capacity, he has been involved in the
development, analysis, marketing and management of public and
private investment programs investing in net lease properties as
well as public and private investment programs investing in
energy development. Since 1971, Mr. Johnson has been the
president, a director and a registered principal of AEI
Incorporated, which is registered with the Securities and
Exchange Commission as a securities broker-dealer, is a member of
the National Association of Securities Dealers, Inc. (NASD) and
is a member of the Security Investors Protection Corporation
(SIPC). Mr. Johnson has been president, a director and the
principal shareholder of AEI Fund Management, Inc., a real estate
management company founded by him, since 1978. Mr. Johnson is
currently a general partner or principal of the general partner
in fifteen other limited partnerships.
Mark E. Larson, age 43, is Executive Vice President,
Treasurer and Chief Financial Officer and has been elected to
continue in these position until September, 1995. Mr. Larson has
been executive Vice President and Treasurer since the formation
of AFM in September, 1988 and Chief Financial Officer since
January, 1990. In January, 1993 Mr. Larson was elected to serve
as Secretary of AFM and will continue to serve until September,
1996. Mr. Larson has been employed by AEI Fund Management, Inc.
and affiliated entities since 1985. From 1979 to 1985, Mr.
Larson was with Apache Corporation as manager of Program
Accounting responsible for the accounting and reports for
approximately 46 public partnerships. Mr. Larson is responsible
for supervising the accounting functions of AFM and the
registrant.
ITEM 10. EXECUTIVE COMPENSATION.
The General Partner and affiliates are reimbursed at cost
for all services performed on behalf of the registrant and for
all third party expenses paid on behalf of the registrant. The
cost for services performed on behalf of the registrant is actual
time spent performing such services plus an overhead burden.
These services include organizing the registrant and arranging
for the offer and sale of Units, reviewing properties for
acquisition and rendering administrative and management services.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT.
AFM, the Managing General Partner of the registrant, and
Robert P. Johnson, its Individual General Partner, contributed
$1,000 in total for their interest in the registrant. See Item 1
for a discussion of their share of the registrant's profits and
losses. During 1990, AFM purchased twenty Limited Partnership
Units (less than 1% of the Units outstanding) from certain
Limited Partners. As of December 31, 1995, Mr. Johnson owned
twenty-six Limited Partnership Units (less than 1% of the Units
outstanding).
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The registrant, AFM and its affiliates have common
management and utilize the same facilities. As a result, certain
administrative expenses are allocated among these related
entities. All of such activities and any other transactions
involving the affiliates of the General Partner of the registrant
are governed by, and are conducted in conformity with, the
limitations set forth in the Limited Partnership Agreement of the
registrant.
The following table sets forth the forms of compensation,
distributions and cost reimbursements paid by the registrant to
the General Partners or their Affiliates in connection with the
operation of the Fund and its properties for the period from
inception through December 31, 1995.
Person or Entity Amount Incurred From Inception
Receiving Form and Method (September 20, 1988) to
Compensation of Compensation December 31, 1995
AEI Incorporated Selling Commissions equal to $ 2,278,305
7% of proceeds plus a 3%
nonaccountable expense allowance,
most of which was reallowed to
Participating Dealers.
General Partners and Reimbursement at Cost for other $ 1,064,137
Affiliates Organization and Offering Costs.
General Partners and Reimbursement at Cost for all $ 506,009
Affiliates Acquisition Expenses
General Partners 1% of Net Cash Flow in any $ 103,978
fiscal year until the Limited
Partners have received annual, non-
cumulative distributions of Net Cash
Flow equal to 10% of their Adjusted
Capital Contributions and 10% of any
remaining Net Cash Flow in such
fiscal year.
General Partners and Reimbursement at Cost for all $ 1,746,977
Affiliates Administrative Expenses attributable
to the Fund, including all expenses
related to management and disposition
of the Fund's properties and all other
transfer agency, reporting, partner
relations and other administrative functions.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
(Continued)
Person or Entity Amount Incurred From Inception
Receiving Form and Method (September 20, 1988) to
Compensation of Compensation December 31, 1995
General Partners 15% of distributions of $ 8,021
Proceeds of Sale other than
distributions necessary to restore
Adjusted Capital Contributions and
provide a 6% cumulative return to
Limited Partners. The General Partners
will receive only 1% of distributions
of Net Proceeds of Sale until Limited
Partners have received an amount equal to
(a) their Adjusted Capital Contributions,
plus (b) an amount equal to 14% of their
Adjusted Capital Contributions per annum,
cumulative but not compounded,less (c) all
previous cash distributions to the Limited
Partners.
The limitations included in the Partnership Agreement
require that the cumulative reimbursements to the General
Partners and their affiliates for administrative expenses not
allowed under the NASAA Guidelines ("Guidelines") will not exceed
the sum of (i) the front-end fees allowed by the Guidelines less
the front-end fees paid, (ii) the cumulative property management
fees allowed but not paid, (iii) any real estate commission
allowed under the Guidelines, and (iv) 10% of Net Cash Flow less
the Net Cash Flow actually distributed. The reimbursements not
allowed under the Guidelines include a controlling person's
salary and fringe benefits, rent and depreciation. As of
December 31, 1995, the cumulative reimbursements to the General
Partners and their affiliates did not exceed those amounts.
PART IV
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
A. Exhibits -
Description
3.1 Certificate of Limited
Partnership (incorporated by reference to
Exhibit 3.1 of the registrant's
Registration Statement on Form S-11 filed
with the Commission on September 26, 1988
[File No. 33-24419]).
3.2 Limited Partnership
Agreement (incorporated by reference to
Exhibit 3.2 of the registrant's
Registration Statement on Form S-11 filed
with the Commission on September 26, 1988
[File No. 33-24419]).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
(3) Exhibits - (Continued)
Description
10.1 Net Lease Agreement dated
September 28, 1989 between the
Partnership and Children's World Learning
Centers, Inc. relating to the property at
4120 E. Ranch Circle Drive, Phoenix,
Arizona (incorporated by reference to
Exhibit 10.2 of Post-Effective Amendment
No. 1 to the registrant's Registration
Statement on Form S-11 filed with the
Commission on April 14, 1990 [File No. 33-
24419]).
10.2 Net Lease Agreement dated
January 30, 1990 between the Partnership
and Triple S. Restaurants, Inc. relating
to the property at 2711 Water Park Drive,
Mason, Ohio (incorporated by reference to
Exhibit 10.3 of Form 10-K filed with the
Commission on July 27, 1992).
10.3 Net Lease Agreement dated
June 26, 1990 between the Partnership and
Children's World Learning Centers, Inc.
relating to the property at 2100 North
Highway 7, Blue Springs, Missouri
(incorporated by reference to Exhibit
10.6 of Form 10-K filed with the
Commission on July 27, 1992).
10.4 Net Lease Agreement dated
August 24, 1990, between the Partnership
and Triple S. Restaurants, Inc. relating
to the property at 950 W. Central Avenue,
Springboro, Ohio (incorporated by
reference to Exhibit 10.7 of Form 10-K
filed with the Commission on July 27,
1992).
10.5 Net Lease Agreement dated
September 13, 1990 between the
Partnership and Children's World Learning
Centers, Inc. relating to the property at
8555 Monrovia Street, Lenexa, Kansas
(incorporated by reference to Exhibit
10.8 of Form 10-K filed with the
Commission on July 27, 1992).
10.6 Net Lease Agreement dated
December 29, 1990 between the Partnership
and Taco Cabana, Inc. relating to the
property at 7339 San Pedro Avenue, San
Antonio, Texas (incorporated by reference
to Exhibit 10.9 of Form 10-K filed with
the Commission on July 27, 1992).
10.7 Net Lease Agreement dated
January 22, 1991 between the Partnership
and Heartland Restaurant Corporation
relating to the property at 1301 N.W.
114th Street, Clive, Iowa (incorporated
by reference to Exhibit 10.10 of Form 10-
K filed with the Commission on July 27,
1992).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
(3) Exhibits - (Continued)
Description
10.8 Net Lease Agreement dated
March 29, 1991 between the Partnership
and Triple S. Restaurants, Inc. relating
to the property at 6435 Dixie Highway,
Fairfield, Ohio (incorporated by
reference to Exhibit 10.11 of Form 10-K
filed with the Commission on July 27,
1992).
10.9 Net Lease Agreement dated
June 20, 1991 between the Partnership and
Children's World Learning Centers, Inc.
relating to the property at 1231 Sunbury
Road, Westerville, Ohio (incorporated by
reference to Exhibit 10.12 of Form 10-K
filed with the Commission on July 27,
1992).
10.10 Net Lease Agreement
dated July 19, 1991 between the
Partnership and Taco Cabana, Inc.
relating to the property at 6867 Highway
90 West, San Antonio, Texas (incorporated
by reference to Exhibit 10.13 of Form 10-
K filed with the Commission on July 27,
1992).
10.11 Net Lease Agreement
dated August 9, 1991 between the
Partnership and Red Line Taco One, Ltd.
relating to the property at 54 South
Expressway, Brownsville, Texas
(incorporated by reference to Exhibit
10.14 of Form 10-K filed with the
Commission on July 27, 1992).
10.12 Net Lease Agreement
dated October 31, 1991 between the
Partnership and T.S.S.O., Inc. relating
to the property at 5701 Emerald Coast
Parkway, Destin, Florida (incorporated by
reference to Exhibit 10.15 of Form 10-K
filed with the Commission on July 27,
1992).
10.13 Net Lease Agreement
dated December 10, 1991 between the
Partnership and Pasta Fair of Belleview,
Inc. relating to the property at 10401
Highway 441, Belleview, Florida
(incorporated by reference to Exhibit
10.16 of Form 10-K filed with the
Commission on July 27, 1992).
10.14 Net Lease Agreement
dated May 1, 1992 between the Partnership
and Taco Cabana, Inc. relating to the
property at 811 I-H North, New Braunfels,
Texas (incorporated by reference to
Exhibit 10.17 of Form 10-K filed with the
Commission on July 27, 1992).
10.15 Net Lease Agreement
dated July 28, 1992 between the
Partnership and Children's World Learning
Centers, Inc. relating to the property at
4885 Cherry Bottom Road, Columbus, Ohio
(incorporated by reference to Exhibit
10.17 of Form 10-K filed with the
Commission on March 29, 1993).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
(3) Exhibits - (Continued)
Description
10.16 Amendment dated
November 17, 1992, to Net Lease
Agreements between the Partnership and
Triple S Restaurants, Inc. relating to
properties at 2711 Waterpark Drive,
Cincinnati, Ohio, 950 W. Central Avenue,
Springboro, Ohio, and 6435 Dixie Highway,
Fairfield, Ohio (incorporated by
reference to Exhibit 10.18 of Form 10-K
filed with the Commission on March 29,
1993).
10.17 Net Lease Agreement
dated December 7, 1992 between the
Partnership and Red Line San Antonio One,
Ltd. relating to the property at 529 Fair
Avenue, San Antonio, Texas (incorporated
by reference to Exhibit 10.19 of Form 10-
K filed with the Commission on March 29,
1993).
10.18 Net Lease Agreement
dated December 7, 1992 between the
Partnership and Red Line San Antonio One,
Ltd. relating to the property at 4606
Rittiman Road, San Antonio, Texas
(incorporated by reference to Exhibit
10.20 of Form 10-K filed with the
Commission on March 29, 1993).
10.19 Net Lease Agreement
dated May 5, 1993 between the Partnership
and GC Slidell, Inc. relating to the
property at 850 I-10 Service Road,
Slidell, Louisiana (incorporated by
reference to Exhibit 10.22 of Form 10-K
filed with the Commission on March 29,
1994).
10.20 Net Lease Agreement
dated June 16, 1993 between the
Partnership and JB's Restaurants, Inc.
relating to the property at 330 South
Wilmot Road, Tucson, Arizona
(incorporated by reference to Exhibit
10.23 of Form 10-K filed with the
Commission on March 29, 1994).
10.21 Purchase Agreement
dated May 24, 1994 between the
Partnership and Nicoletta Trust relating
to the property at 5701 Emerald Coast
Parkway, Destin, Florida (incorporated by
reference to Exhibit 10.23 of Form 10-KSB
filed with the Commission on March 30,
1995).
10.22 Co-tenancy Agreement
dated June 17, 1994 between the
Partnership and Nicoletta Trust relating
to the property at 5701 Emerald Coast
Parkway, Destin, Florida (incorporated by
reference to Exhibit 10.24 of Form 10-KSB
filed with the Commission on March 30,
1995).
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K AND FORM 8-K/A.
(3) Exhibits - (Continued)
Description
10.23 Sale and Leaseback
Financing Commitment Agreement dated
September 21, 1995 and Amendment to Sale
and Leaseback Financing Commitment
Agreement dated October 18, 1995 between
AEI Fund Management, Inc. and Tractor
Supply Company, Inc. relating to the
property at Old Airport Road and I-81,
Bristol, Virginia (incorporated by
reference to Exhibit 10.1 of Form 10-QSB
filed with the Commission on November 2,
1995).
10.24 Sale and Leaseback
Financing Commitment dated September 5,
1995 between AEI Fund Management, Inc.
and Americana Dining Corporation relating
to the property at 161 E. Campus View
Boulevard, Columbus, Ohio.
10.25 Amendment to Sale and
Leaseback Financing Commitment dated
November 30, 1995 between AEI Fund
Management, Inc., Americana Dining
Corporation, AEI Income & Growth Fund XXI
Limited Partnership and the Partnership
relating to the property at 161 E. Campus
View Boulevard, Columbus, Ohio.
10.26 Amendment of Lease
dated January 25, 1996 between the
Partnership, AEI Net Lease Income &
Growth Fund XIX Limited Partnership, Red
Line San Antonio One, Ltd. and Red Line
Burgers, Inc. relating to the properties
at 529 Fair Avenue, and 4606 Rittiman
Road, San Antonio, Texas.
B. Reports on Form 8-K and Form 8-K/A - None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
AEI REAL ESTATE FUND XVIII
Limited Partnership
By: AEI Fund Management XVIII, Inc.
Its Managing General Partner
March 21, 1996 By: /s/ Robert P. Johnson
Robert P. Johnson, President and Director
(Principal Executive Officer)
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Name Title Date
/s/ Robert P. Johnson President(Principal Executive Officer) March 21, 1996
Robert P. Johnson and Sole Director of Managing General
Partner
/s/ Mark E. Larson Executive Vice President, Treasurer March 21, 1996
Mark E. Larson and Chief Financial Officer
(Principal Financial and Accounting Officer)
